Men are reflected in a screen displaying a graph showing the movements of recent share averages outside a brokerage in Tokyo April 11, 2014. REUTERS/Issei Kato

German think-tank ZEW said analyst and investor sentiment fell for a fourth month in a row in April, with one economist blaming ”gusts of wind“ from the East”.

Russia said Ukraine, whose Crimea region it annexed last month, was on the brink of civil war. Kiev said an “anti-terrorist” operation against Russian separatists was under way, though any crackdown appeared to be off to a slow start.

U.S. officials have said they were in talks with European partners on how to punish Moscow for what Kiev and its Western allies call a Russian plot to annex Ukraine.

“Things have not improved in Ukraine, and this is weighing on the markets,” said Francois Savary, chief investment officer at Swiss bank Reyl.

U.S. stock futures edged higher, suggesting a tentative rise on Wall Street later in the day.

However, the focus in Asia was on data showing China’s money supply grew at the weakest pace in more than a decade in March, in another sign of softening momentum in the world’s second largest economy.

Japan’s Nikkei rose 0.8 percent, as bargain-hunters stepped in after the index hit a six-month low on Monday.

EASY DOES IT

Data showing annual inflation in Britain dipped to 1.6 percent nudged sterling higher after some in the market had speculated a faster fall could have pushed back expectations of when the Bank of England would raise interest rates.

Sterling reversed earlier losses after the data to trade all but flat on the day at $1.6725.

U.S. inflation figures are due later on Tuesday. Forecast-beating U.S. retail sales numbers on Monday supported the dollar, which gained 0.15 percent against a currency basket.

The euro remained under pressure, down slightly at a six-day low of $1.38, on weekend comments from European Central Bank President Mario Draghi, who said exchange rate strength could trigger further policy easing.

“At the same time, the capital inflow situation is supporting the euro and unless the ECB takes action, like cutting the deposit rate to zero, it will be tough for the euro to drop much.”

The dollar stood at 101.81 yen, barely changed from late New York trade on Monday, when it pulled away from a three-week trough of 101.32 hit late last week.

U.S. 10-year Treasuries yields held steady compared with late Monday levels at around 2.64 percent, not far from a six-week low of 2.603 percent hit on Monday.

Euro zone government bond yields fell, with those on Italian 10-year debt hitting a record low around 3.125 percent.

Gold fell from Monday’s three-week high of $1,330.90, trading down 1 percent at $1,311 an ounce, while Brent crude futures dropped a third of a percent below $109 a barrel following a surge to a six-week high on Monday.